IMPACT OF ADVERTISEMENT ON BRAND & REVENUE A CASE STUDY ON

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CONTENTS
1. Introduction

2. About Airtel 3. Positioning Of Airtel Through Celebrity Endorsement 4. Effect of Advertising Expenditure On Sales 5. Questionnaire 6. Questionnaire Survey Findings 7. Conclusion

INTRODUCTION
Brands all over the world use celebrities to advertise their products. As early as 1890, actress Sarah Bernhardt appeared on posters for La Diaphane, a famous brand of rice powder at the time (Lehu, 1993). The use of celebrities in advertising is not, therefore, a new phenomenon, but it has become

As a result. Brands like Pepsi have featured stars such as Michael Jackson.increasingly widespread. like perfume and cosmetics. as well as TV ads for Dannon yoghurt. We shall attempt to define this concept and its antecedents in more detail. in a single week. Erdogan. French footballer Zinedine Zidane appeared on posters for Dior perfume and Leader Price hard-discount supermarkets. such as Cindy Crawford. consumers have become increasingly keen on celebrities (Masse-Stamberger. Firstly. we consider advertising according to an extremely broad definition. which is apparently a crucial factor. and Gatorade. Hanes. 1999. or even the Spice Girls. Oakley. It has even become common practice for some companies. 1991). We shall then propose a scale for measuring perceived congruency between celebrities and brands. it has certainly become much more widespread over the past twenty years. who appears in advertisements for Nike. Linda Evangelista. While celebrity endorsement in advertising is not a new phenomenon. with varying impact (Erdogan. Pizza Hut launched its restaurants on the international market with icons that are almost universally recognized. Mc Donald's. We shall start by defining terms such as "celebrity” and "endorsement" and presenting the main models in this field then introduce a two-dimensional analysis of congruency. 2005): they are interested in people who are well-known simply due to the fact they have appeared on television. Coke. in agreement with Pringle and Binet: "Everything that has a name on it is . Wheaties. Alongside this phenomenon. 2005. nearly 700 television advertisements featured celebrities. and celebrity magazines are tremendously popular. Ohanian. research into the role of celebrities in advertising has also increased since the 1990s (Pringle and Binet. The number of celebrities in advertising increased by 60 % between 2000 and 2004 (Neumann. We must first define what we mean by celebrity endorsements in advertising. This research more specifically investigates the concept of congruency between celebrity and brand. In fact. 2006). — like the stars of reality shows —.1999). as people always want to know more about stars' lives. Similarly.. Some stars have several contracts with different brands: it is estimated that Michael Jordan. Madonna. in 2004. Stars have become a vital component of advertising for certain categories of products. 2001). has an impact worth about 14 billion dollars on the American economy (Erdogan & al. and Pamela Anderson.

It covers media advertising. that inform the public about their private lives. models. a Paris communication agency specialized in consulting on the choice of celebrities. as well as golfer Tiger Woods.100. face. "a celebrity is a person whose name. direct marketing. "celebrity is measured by the number of press cuttings and broadcast time devoted to a person and is thus distinguished from fame. who recently replaced the footballer as the French public's favorite personality. This definition corresponds to "classic" celebrity types. it is simply the result of the media attention given to an act or person". sponsoring. which is generated by a person's outstanding work or exemplary life. Endorsement (sometimes known as Celebrity Marketing) is a phenomenon where celebrities lend their image to brands. Of course. and rock stars … These people maintain their "celebrity" by appearances in mass media. Zinedine Zidane refuses all proposals below 1. . Celebrity endorsements: a major phenomenon The fees received by celebrities for brand endorsements are very high: American actors Nicole Kidmann and Brad Pitt.celebrity has nothing to do with merit. a celebrity may be worthy of fame. In Europe. As consumers do not generally make any distinction among these forms of communication (Ford-Hutchinson and Rothwell. According to Glamour Speakers. We will use McCracken's definition (1989. but the connection is accidental . 1999).advertising". such as fashion magazines and tabloids.2 million dollars. This definition corresponds to consumer perception of advertising. Several researchers have attempted to define endorsement over the last twenty years (see Erdogan. may receive almost 5 million dollars per contract. as we are examining the issue from a consumer standpoint. etc. received 1. The term "celebrity" needs to be defined: according to the "Encyclopédie de l’Agora". Yannick Noah.000 dollars (exclusive of commission on sales) for the new Sloggi underwear campaign. 2002). it was appropriate to adopt this premise in our study. as was the case of Lindbergh. like actors. p. as well as sales promotion.310): "the celebrity endorser is defined as any individual who enjoys public recognition and who uses this recognition on behalf of a consumer good by appearing with it in an advertisement ». sports personalities. and voice are spontaneously recognized by a proportion of the general public (…) and who is immediately associated with a set of values".

above all. This is why it is interesting to understand how endorsement works and identify the decisive factors for its effectiveness.. highly variable. 2004). . new products are being launched all the time. particularly. 2001).Research has attempted to elucidate the reasons why companies invest so much money in communication featuring celebrities (Erdogan. In 1998. Beyond this objective of differentiation. it also gives brands an opportunity to focus their positioning in consumers' minds. and the quality of the advertising itself. led to a 47% increase in the brand's sales on the men's and 5% on the women's market over the past 10 months. who are more likely to report on events concerning the brand if the celebrities are present (e. According to Jacques Helleu. generally by featuring movie stars. including the choice of celebrity. like Véronique Jeannot in 1988. or singers. we shall present the main models devised to explain the type of relationship that develops between celebrities and consumers. There are many reasons (Lehu. 1993). but do so. it is significant that celebrity endorsements are a way of avoiding anonymity and standing out from the competition in saturated markets. 2001). featuring Yannick Noah. Cosmetic brands can no longer achieve recognition merely due to the intrinsic quality of their products. enabled this brand to develop awareness and a quality image. Véronique Genest and Sophie Duez. From this perspective. however. in the cosmetic and perfume industry. Sometimes. The results of celebrity endorsements are. Fortune magazine estimated Michael Jordan's impact on the American economy and. Baket and Tagg. "it is the only way of making a sufficiently strong impression on consumers memories to trigger a purchase when they are in a sales outlet at a later date" (Devilliers. models. These models are essential to our understanding of the influence of celebrity on brand perception. behind Fleury Michon. as well as the media programme. artistic director for Channel. particularly. by the image they project through their advertising campaigns. Celebrities make an impression on consumers. 2004): recruiting famous actresses. or even press relations. Erdogan and al. thus moving up to second position in this market. The impact on sales is more difficult to assess. brand promotion parties. celebrity endorsements also give a brand considerable exposure in the press. as there are many factors involved. For example. a French SME specialized in ham (Maudieu. and.g. 2006). on brands like Nike and Disney. at 14 billion dollars. but firstly. which is an excellent result in a declining market (Neumann. Another interesting example is that of Madrange. Recent advertising campaigns for Sloggi.

While there is no doubt that a celebrity endorser may improve attitude towards advertising and a brand. knowledge. • • Expertise refers to the extent to which the endorser is perceived as a valid source of information (Erdogan. the endorser's physical attractiveness is assumed to have an influence on the target's acceptance of the advertising. 1991). . 1951). its impact on purchasing behavior is less clear (Erdogan. objective way the information is presented (Ohanian. Erdogan's review of previous literature (1999) indicated that a source perceived as highly credible is more effective and persuasive than a less credible one. Trustworthiness refers to the endorser's honesty. Ohanian (1990) developed a three-dimensional scale for assessing a celebrity’s credibility. 1999). The source credibility model The source credibility model was developed in the 1950s by Hovland and colleagues (Hovland and Weiss. It is a matter of determining whether the advertising target perceives the endorser as having a certain level of experience. 1979) and is mainly significant for brands related to physical appearance (Kamins. as perceived by the target. The three dimensions in this credibility scale are attractiveness. Here. the effectiveness of a message depends on the perceived level of expertise and trustworthiness of an endorser (Ohanian. as well as inducing a more positive change of attitude towards the brand or product and more changes in behavior. credibility. particularly due to the phenomenon of identification. The effectiveness of the message depends on the endorser's similarity. Attractiveness of the source is not the only characteristic of a celebrity to take into account (Friedman and Friedman. and know-how that makes their recommendation of a product and/or brand credible. and familiarity. It is a matter of determining whether the consumer trusts the source for the honest. 1999). limiting the assessment of an individual to certain dimensions may seem rather restrictive. According to this model. and integrity. However. trustworthiness. 1991). 1990). and purchasing intent (Kahle and Homer. 1985). attitude towards the brand.The source attractiveness model The attractiveness model assumes that the effectiveness of the message depends on the physical characteristics of the source. as McCracken (1989) and Erdogan (1999) noted. and expertise. likeableness. A celebrity spokesperson's physical attractiveness has a positive impact on brand recall.

celebrities have a shared cultural significance in the eyes of consumers (McCracken. However. This process is based on the idea that. in advertisements with celebrity spokespersons. as it explains the endorsement process as a whole. as a whole. They do not properly take into account the multifunctional aspect of certain characteristics of the source and there is no proof that the dimensions examined are the correct ones. McCracken defines this transfer as the translation of the meaning of celebrity to a product or brand. which is organized around culture. We think that McCracken's meaning transfer model (1989). About Bharti Airtel Limited Bharti Airtel Limited. e. The transfer theory relies on the endorsement process described by McCracken (1989). 1999. Bower and Landreth. which has been transferred to the product. which includes all the cultural connotations of celebrity. merely focusing on certain characteristics of the endorser.These models may seem attractive but they have been criticized on several levels (Erdogan. is more suitable. is capable of contributing to an advertisement. 1989). a group company of Bharti Enterprises.g. Endorsement is effective when an individual who buys and consumes the product appropriates the meaning associated with the celebrity. McCracken's meaning transfer model (1989) This model has the advantage of including affective and cognitive aspects. these models seem incomplete as they do not consider all the significance and perceptions connected to a particular celebrity. in the consumer society. above all. is India's leading integrated telecom services provider with an aggregate of 50 million . so we do not feel they are capable of capturing what a person. 1986. 2001).

under a MoU with Wal-Mart for the cash & carry business.000 kms covering all the major cities in the country. All these services are provided under the Airtel brand. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the B&T business offers broadband & telephone services in 94 cities. All these services are provided under the Airtel brand. It has successfully launched an international venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA. For more information. Ltd. Airtel comes to you from Bharti Airtel Limited. The B&T business provides broadband & telephone services in 94 cities. visit www. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) mobile services. world leader in financial protection and wealth management.in Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. Bharti Airtel has been rated among the best performing companies in the world in the Business Week IT 100 list 2007.i2i to Singapore and SEA-ME-WE-4 to Europe. Bharti Airtel is structured into three strategic business units . The company has two international landing stations in Chennai that connects two submarine cable systems .customers. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles. Bharti has recently forayed into retail business as Bharti Retail Pvt.Mobile services. India’s largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. broadband & telephone services (B&T) & enterprise services.bhartiairtel. has a diverse business portfolio and has created global brands in the telecommunication sector. Airtel's high-speed optic fibre network currently spans over 53. ORGANISATION STRUCTURE . Broadband & Telephone (B&T) services and Enterprise services. Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The Bharti Group.

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BHARTI AIRTEL Services & Product VOICE BASED • Voice mail • Dial a service SMS BASED • Info messages • SMS Chat • Email access via SMS • Ringtones and Logo downloads • Instant Messenger GPRS • Mobile office • Content Portal OTHERS • MMS • Fax & Data. logos. CLIR. • Itemized billing. • Location based services Business Model and Revenue Sources Content and Data Downloads • Offers Java games. ring tones through their content portal • Also in agreement with Yahoo India for basic content download . Prepaid Roaming.

wallpapers available at their content Portal • Hosting third party campaigns like Coke and Master Card SMS Polls on TV • Users can vote through SMS for polls organized by TV Channels • Revenue sharing agreements with TV channels Prepaid Recharging • Subscribers can recharge either at ATMs using their ATM cards Or • Direct debit facility with the subscriber’s bank account (SMS Based service) OPERATORS – FIXED.Advertising Campaigns • Latest movie ring tones. CDMA AND GSM FIXED LINE • BSNL (state owned) • MTNL (state owned) • Bharti (Touchtel) • Tata Telecom • HFCL • Shyam Telecom WLL/CDMA • BSNL • MTNL .

• Reliance • Shyam Telecom • Tata Telecom • HFCL 6 Operators GSM • Bharti • BPL • BSNL • Hutch • Idea • MTNL • Reliance •Spice Telecom 8 Operators WLL/CDMA • BSNL • MTNL • Reliance • Shyam Telecom • Tata Telecom • HFCL 6 Operators .

Mobile Operators Subscriber Base – GSM Bharti is the undisputed leader among GSM operators Bharti was the first mobile operator in India. .

Industry observers primarily attributed it to Bharti's strong brand building and positioning strategies. . a sum usually unheard of. The campaign received brickbats as well as bouquets in the media. A. The company posted revenues of Rs 8. which despite using the 'oft-repeated' celebrity endorsement route was unusual in terms of its celebrity selection. The Airtel brand (and the prepaid card service brand.' The company also decided to undertake a comprehensive brand building program for the company and chose the slogan 'Unlimited Freedom' for the same.Positioning Of Airtel Through Celebrity Endorsement FROM 'TOUCH TOMORROW' TO 'LIVE EVERY MOMENT' In late-2002. Bharti changed the brand's tagline in early-2002 from 'Touch Tomorrow' to 'Live Every Moment. as part of which. "Airtel's brand identity and campaign will now have a new younger and international look and feel that builds on the earlier positioning. both for the selection of Rahman and the TVC's execution. (Bharti).R Rahman to promote its brand. Bharti Cellular Ltd. However." Bharti's massive media expenditure plans were no surprise.48 billion. Magic) had top-of-the-mind recall amongst cellular phone users and enjoyed a leadership position in most markets. considering the fact that it was the largest cellular telecom company in the country reaching over 600 million people in 16 (out of 29) states of India. Commenting on these changes. The TVC was a part of the brand repositioning and restructuring efforts for Airtel. company sources said. Instead of using the usual movie stars/sports celebrities. for celebrity endorsers in India. The campaign attracted considerable media attention because this was the first time Rahman had agreed to do a television commercial and also because. Rahman had been paid Rs 10 million for the campaign. Bharti claimed to have scored an ace in terms of getting Rahman to compose five exclusive symphonies downloadable as ring tones for Airtel users. India's largest cellular telephone company released a television commercial (TVC). it chose one of the country's most successful music composers.

CELEBRITY ENDOSREMENT Forms of Celebrity:      As a spokesperson Multiple celebrities for one product Multiple product for one celebrity Celebrity Pairing Endorsement in movies WHEN DO COMPANIES INDUGLE IN CELEBRITIES ENDORSEMENT:      Close Substitutes Clear Differentiation Entry into the Market Lifecycle of the Brand Competition Criteria for selecting a celebrity:  Celebrity-Product match  Celebrity.target audience  Cost  Celebrity credibility  Celebrity availability  Celebrity physical attractiveness Why customers accept the celebrity endorsements:  High degree of attention and recall for consumers  Celebrity expertise perceived relevant  Celebrities are perceived trustworthy  Ambitious psyche  Physical Attraction .

Celebrity disconnect  Clutter Flutter  Dissatisfaction with product performance  Confusion/Skepticism .Benefits of Celebrity Endorsement:  Establishes credibility  Attracts attention  Associative benefit  Psychographic connect  Demographic connect  Mass appeal Positive impact of Celebrity endorsement on the brand:  Sense of trust  Attention of the target group  Persuasive message  Demographic and psychographic  Public relation opportunities Why Celebrity endorsements do not work sometimes:  Improper Positioning  Brand.

Television Commercials and its ratings AirTel 'Express Yourself ' commercial Airtel 'Child in the Rain' commercial Airtel 'Lifetime Incoming' commercial Airtel'Kuch bandhan atoot hote hain jaise' commerical Product Rating: Product Recommendation: (Read 16 reviews) (Read 1 review) (Read 1 review) 88% 0% 100% 100% Remove Camera Effects: Concept: Execution: Model Choice: Model Performance: Jingle: First advertisement Child in the rain .

110.845.000 43.357.162.000 = 52.365.372.Airtel'Kuch bandhan atoot hote hain jaise' Latest Advertisement EFFECT OF ADVERTISING EXPENDITURE ON SALES FOR THE YEAR ENDED MARCH 31.000 6.000 .372.110.442.000 81.000 = 7.78% Advertisement Expenditure to Total Income Advertisement Expenditure Total Income 3.372.11% Advertisement Expenditure to Total Expenditure Advertisement Expenditure Total Expenditure 3.357.162.365.442.357.000 Advertisement Expenditure Expenditure to Sales & Marketing 3357372000 *100 6.557. 2006 Advertisement Expenditure to Sales & Marketing Expenditure Advertisement Expenditure Sales & Marketing Expenditure 3.000 3357372000 *100 Advertisement Expenditure to Total Expenditure 43.

000 = 4.000 8.924.547.557.335.34% .11% ANALYSIS • The advertising expenditures are half of the total Sales and marketing expenditures.113.e: Advertising expenditure= 52% of Sales & marketing expenditures. FOR THE YEAR ENDED MARCH 31.000 = 49. which indicates a sufficient spending on advertising i. 2007 Advertisement Expenditure to Sales & Marketing Expenditure Advertisement Expenditure Sales & Marketing Expenditure 4.335. • It also indicates that there is substantial Expenditure on advertising initiatives.845.3357372000 *100 Advertisement Expenditure to Total Income 81.000 Advertisement Expenditure Expenditure to Sales & Marketing 4113547000 * 100 8.924.

000 4113547000 * 100 Advertisement Expenditure to Total Expenditure 63. FOR THE YEAR ENDED MARCH 31.547.000 4113547000 * 100 Advertisement Expenditure to Total Income 117. which indicates that they are reducing their focus on advertising by a few basis points.113.000 63.581. it shows that Advertising Expenses are 49% of the total Sales & Marketing.868.255.000 = 6.868.000 117.255. 2008 .113.547.Advertisement Expenditure to Total Expenditure Advertisement Expenditure Total Expenditure 4.093.000 = 3.581.093.50% ANALYSIS • In the year 2006.44% Advertisement Expenditure to Total Income Advertisement Expenditure Total Income 4.

000 4308349000 * 100 Advertisement Expenditure to Total Expenditure 92.037.33% .202.387.308.000 184.000 92.000 4308349000 * 100 Advertisement Expenditure to Total Income 184.000 11.022.000 = 2.000 = 37.202.349.349.308.349.308.448.022.000 Advertisement Expenditure Expenditure to Sales & Marketing 4308349000 * 100 11.448.387.83% Advertisement Expenditure to Total Expenditure Advertisement Expenditure Total Expenditure 4.Advertisement Expenditure to Sales & Marketing Expenditure Advertisement Expenditure Sales & Marketing Expenditure 4.842.000 = 4.037.64% Advertisement Expenditure to Total Income Advertisement Expenditure Total Income 4.842.

• • As Advertising Expenditure to Total Revenue is decreasing year by year. are contributing equally to the total revenues. they have reduced their Advertisement Expenditure to Sales & Marketing Expenditure drastically by 24% on yearly basis. From this we can also conclude rather than advertising Expenditure other factors like sales promotion etc. .ANALYSIS • In the year 2008. this indicates good brand development for the company.

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